IMF says not in debt talks with Greece

AFP , Wednesday 4 Feb 2015

The International Monetary Fund said Wednesday it was not in debt talks with the new anti-austerity Greek government, which wants to renegotiate its bailout from the IMF and European Union.

"There is an agreed framework for dealing with debt in the current program. There has been no discussion with the authorities on a change in this framework," the IMF said in a brief statement.

The IMF's European department chief, Poul Thomsen, who is charge of the IMF program with Greece, had met with Greek Finance Minister Yanis Varoufakis over the weekend "to get acquainted and to discuss the challenges facing Greece," Fund spokeswoman Angela Gaviria said in an email to AFP.

She did not provide further details.

The radical left Syriza party won a resounding victory in the January 25 election after pledging to end the previous conservative administration's policies of austerity.

The Syriza-led government is pushing to renegotiate the terms of its massive 240 billion euro ($270 billion) bailout from the IMF, the European Commission and the European Central Bank.

Varoufakis, in an interview with Italian newspaper La Repubblica on Wednesday, said the government was proposing that Greece's debt owed to the ECB be repaid in full on the July 20 deadline.

But he said that the debt owed to national governments and the IMF could be swapped for growth-linked bonds.

"We are proposing the other tranches, to the IMF and other countries, be substituted with new bonds at market interest, which is very low right now, with a clause: we will start the entire repayment once Greece's economy sees solid growth," he said.

Varoufakis said the idea had already been put to the IMF.

He said he did not see "why they should not accept an extension like they always do in these situations, at least until the end of the year."

Greece owes nearly 25 billion euros to the IMF, according to the global crisis lender's website.

The IMF in theory benefits from its status as a priority lender which guarantees it will be reimbursed fully by countries receiving its financial assistance and prohibits restructuring of its debt.

Under the austerity policies, imposed by the troika of international lenders in exchange for the 2010 and 2012 bailouts, the Greek economy has contracted by a quarter and unemployment has soared above 25 percent, with one in two Greek youths now out of work.

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